FINANCIAL watchdogs are investigating possible insider dealing in the City following a spate of irregular rises in share prices just beforetakeover bids are announced.

The Financial Services Authority (FSA) is understood to be looking into four takeover bids or deals disclosed in the past week.

Unusual share-price movements in supermarket chain Somerfield before it announced a possible takeover approach is one such deal thought to have attracted attention.

The shares rose sharply before it announced a é500m bid.

Also understood to be under the spotlight is security specialist Chubb and Amey, the public finance initiative contractor, both of whose shares changed hands in unusually high volumes before they announced merger bids.

Amey has agreed to be taken over by a Spanish construction company for é81m, while Chubb disclosed an approach, but has not named the bidder.

Phone group mmO2 also saw unusually heavy dealing before it announced the sale of its Dutch subsidiary O2 Netherlands on Monday. It could also be under examination.

Insider dealing occurs when market professionals pass information to each other about bids or imminent takeover deals before the information is made public.